Reference no: EM133113264
Question - Measures of liquidity, Solvency, and Profitability - The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
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Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1
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20Y2
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20Y1
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Retained earnings, January 1
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$3,704,000
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$3,264,000
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Net income
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600,000
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550,000
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Dividends:
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On preferred stock
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(10,000)
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(10,000)
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On common stock
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(100,000)
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(100,000)
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Retained earnings, December 31
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$4,194,000
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$3,704,000
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Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1
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20Y2
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20Y1
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Sales
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$10,850,000
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$10,000,000
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Cost of merchandise sold
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6,000,000
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5,450,000
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Gross profit
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$4,850,000
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$4,550,000
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Selling expenses
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$2,170,000
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$2,000,000
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Administrative expenses
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1,627,500
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1,500,000
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Total operating expenses
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$3,797,500
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$3,500,000
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Income from operations
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$1,052,500
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$1,050,000
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Other revenue and expense:
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Other revenue
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99,500
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20,000
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Other expense (interest)
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(132,000)
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(120,000)
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Income before income tax expense
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$1,020,000
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$950,000
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Income tax expense
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420,000
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400,000
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Net income
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$600,000
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$550,000
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Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1
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20Y2
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20Y1
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Assets
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Current assets:
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Cash
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$1,050,000
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$ 950,000
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Marketable securities
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301,000
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420,000
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Accounts receivable (net)
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585,000
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500,000
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Inventories
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420,000
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380,000
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Prepaid expenses
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108,000
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20,000
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Total current assets
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$2,464,000
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$2,270,000
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Long-term investments
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800,000
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800,000
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Property, plant, and equipment (net)
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5,760,000
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5,184,000
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Total assets
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$9,024,000
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$8,254,000
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Liabilities
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Current liabilities
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$880,000
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$800,000
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Long-term liabilities:
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Mortgage note payable, 6%
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$200,000
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$0
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Bonds payable, 4%
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3,000,000
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$3,000,000
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Total long-term liabilities
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$3,200,000
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$3,000,000
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Total liabilities
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$4,080,000
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$3,800,000
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Stockholders' Equity
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Preferred 4% stock, $5 par
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$250,000
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$250,000
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Common stock, $5 par
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500,000
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500,000
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Retained earnings
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4,194,000
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3,704,000
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Total stockholders' equity
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$4,944,000
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$4,454,000
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Total liabilities and stockholders' equity
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$9,024,000
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$8,254,000
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Required - Determine the following measures for 20Y2,
1. Working capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets
13. Return on stockholders' equity
14. Return on common stockholders' equity
15. Earnings per share on common stock
16. Price-earnings ratio
17. Dividends per share of common stock
18. Dividend yield